Massachusetts junior Sen. Scott Brown (R-Not R) has been a leading opponent in the tug of war over the Volcker rule, which keeps banks from investing in risky hedge funds.
New York Times report:
As regulators put the finishing touches on new rules for Wall Street, they remain entangled in a partisan fight over the overhaul.
In public letters and closed-door meetings, more than 100 lawmakers have lobbied the Federal Reserve and other authorities over the Volcker Rule, records show. The rule, intended to restrict banks from placing risky trades and investing with hedge funds, has drawn an outcry from Republicans who want to mute its effect and some Democrats who want to strengthen it.
Among those most interested in muting it, our own Downtown Scotty Brown:
Internal government documents provide a glimpse of one such lobbying effort last year, when an aide to Senator Scott Brown, Republican of Massachusetts, appealed to the Treasury Department and the Federal Reserve.
The documents show a back-and-forth between the Fed’s top lawyer and Mr. Brown’s staff. “I have a very urgent request,” Nathaniel Hoopes, Mr. Brown’s aide, wrote in an April 2011 e-mail. Seeking to fine-tune an exemption, he argued that a broad range of bank customers should be allowed to invest with hedge funds under the Volcker Rule. “My boss has been hearing it from constituents,” he added, referring to the rule’s impact on Massachusetts-based financial firms.
Those constituents, of course, include high-rolling investment moguls in the Bay State. And, of course, Brown is trying to have it both ways:
Mr. Brown, whose donors include major mutual funds like Fidelity, has been particularly vocal.
He supported the Volcker Rule after chipping away at one of its core tenets. During the debate on Capitol Hill, Mr. Brown championed an exemption that allowed banks to invest up to a 3 percent stake in hedge funds. Banks can also offer hedge fund investments to outside investors like pension funds.
Now, Mr. Brown is fighting over the details of the exemption. While Democrats want to restrict access to customers who already have an account with the bank, Mr. Brown wants to expand the definition of “qualified investors.”
A spokeswoman for Mr. Brown said he was “proud to cast the deciding vote” for Dodd-Frank and that he worked “to protect Massachusetts jobs.”
Or maybe just his job.
Professor Warren, take good notes.